We have all heard of startup accelerators, whether it's Y Combinator, Techstars, 500 Startups, Founder Institute, etc., as well as scores of success stories about each one of them. Yet, despite the huge proliferation of accelerators across the globe, "not all startup accelerators would necessarily be helpful."
Applying for an accelerator program is a major decision, however most founders get confused on aspects like:
Whether they should opt for an accelerator (why)?
If yes, then which is the right one?
Besides, would it be worth the equity?
Finally, how should they make the most of a cohort/program?
Startup Accelerators in a Nutshell
Parameters | Accelerators |
Cohorts (Duration & Type) | Cyclical: 2-6 months, offline/online/hybrid. |
Stage | Early-stage (pre-seed/seed) |
Program Benefits | Mentoring (Expert Advice), Fundraising (Access to Investors), Networking, Customers (External Validation). |
Program Fees (Investment) | $15K - $150K at 0% - 8% (or higher) equity |
Selection Process | Highly competitive for known accelerators, barely 1% qualify. |
Mentoring Process | Deep sessions on various aspects by Mentors, and valuable insights by founders from earlier cohorts. |
Pros and Cons
Accelerators are "worthwhile" depending on what your goal is and whether the program you're in can help you achieve that goal.
The accelerator programs are best for founders, who plan to raise funding to quickly scale up. The best accelerators have deep relationships with a wide network of investors. Accelerator helps you with network building, and connecting you with an awesome network of founders/ex-founders and experts who are more than willing to help you, when you're stuck!
The first-time founders and even experienced entrepreneurs will likely benefit most from all the accelerator’s benefits, when "go to market" is critical for the venture. You have peers at the same stage as you to motivate you, and keep you accountable.
On the flip side, participating in an accelerator program does take up most of the valuable time often ranging from 10 - 24 weeks, which otherwise you would've focused on building your company. Also, you've part ways with a significant chunk of your company!
Should You Opt for an Accelerator?
One of the fundamental answers to whether an accelerator will be worthwhile to your venture is to assess the below aspects:
a. Current stage of your venture i.e. idea, MVP/prototype, pre-revenue, or early-revenue?
If you're at the idea stage, you could certainly approach an incubator first.
In my view, an accelerator is best suited for startups, who are at the MVP or later stages.
b. What is your current goal/necessity?
Accelerators are the best fit for fundraising, mentoring/support, launching MVP, quick go-to market for your product, and finding the Product/Market Fit early!
If your immediate goal is to get more customers/partners, or network with corporates/businesses, etc., there are other avenues for this.
So, it's imperative for you to assess both the above parameters to see whether accelerators are worthwhile for your venture, and which of them can help you achieve your goal/s.
Which of the Startup Accelerators would be the Right Fit?
According to Sanil Sachar, Founder, Huddle, a startup founder should select an accelerator based on the below aspects:
Look at the accelerator's past success stories in the sector, which currently operate in. Multiple success stories indicate the accelerator knows it job well.
Be clear about your expectations from the program (i.e. idea-to-MVP, launching in the market, networking, more customers, fundraising, etc.,) and then explore which accelerator matches best for you.
Listen to the full podcast here - What Startup Accelerators Really Do, the Why and How to Chose the Right One?
How to get the best out of an accelerator program?
Shortened from this Source: 9 Tips to Get the Most Out of Your Accelerator!
Here are the various ways you can take the best advantage of your accelerator program to maximize your chances of long term success:
Keep Engaged: Participate fully in the accelerator’s program. You are there to try new things and push the envelope. Shamelessly ask on anything, you don't understand!
Make Friends: Your fellow entrepreneurs could end up as your accelerator’s greatest assets. These people are creative/innovative like you, and can be your best source for co-founders, employees, employers, or introduce you to investors and other companies as your customers.
Build Your Network: Your accelerator can be a great resource to connect to 1000s of successful entrepreneurs and investors. Dig into this network for hiring and building your company.
Use Their Resources: Take advantage of all their great offerings as early as possible and you can get the most out of it, at later stages.
Never rush into fundraising: Don’t rush to get investors, and never take the first offer you get. Investors will always try to give you small/quick money when your valuation is low. Use demo days to sharpen your story and pitching skills. Quickly build your venture for early Product/Market Fit indication, you’ll probably be able to raise much more money for less equity at that stage.
Listen to Mentors, and be prepared to Pivot: When your cohorts and mentors speak, shut your mouth and listen. They've all gone through and been successful. Ask questions, get their feedback. Often, the initial ideas are only an illusion, you’ll find that the world is much more complex than you perceived it to be. Never be afraid to adjust your solution, once the market’s real pain becomes apparent. Your accelerator is usually the best place to initiate this.
Finally, enjoy your time. You’ll look back at this period as one of your startups’ golden ages. So work hard, progress quickly, but enjoy it while it lasts.
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